SKP Securities had informed the stock exchanges that the meeting of the Board of Directors of the Company is scheduled on 27/04/2019 ,inter alia, to consider and approve the results, dividend and Buy-back of fully paid-up equity shares of the Company, quantum and mode of Buy-back. SKP Securities Buyback as approved by the board on 27-04-19 comprises proposal to Buy-back up to 9,95,000 fully paid up equity shares of
the company at a price of Rs . 70/- (Rupees Seventy Only) per equity share payable in cash for an aggregate consideration of Rs. 69,650,000/-. SKP Securities Buyback represents approximately 22.11% of the total
paid-up share capital of the Company and is on a proportionate basis under “Tender Offer” route
SKP Securities 2019, 2017 : Key Info
|MP befo announcement||61|
|MP after above||64|
|MP befo BM||65|
|Buy Back Price||70||51|
|% Premium on MP||7.69%|
|MP after BM||65.1|
|BuyBack Size- Rs. Cr||6.97||6.2|
|BuyBack Size- Shares||995,000||1215600|
|Tot No.of shares||4,399,400||5615000|
|Equity Capital- cr||4.40||5.62|
|FV of Share in Rs.||10||10|
|Buy Back Issue date||18-08:01-09-17|
|Shares reserved- Retail||149,250||182,340|
|Shares on RD||397,438|
SKP Securities Buyback 2019 : Acceptance Ratio Possibilities
This framework is based on estimation of shareholding of SKP Securities shareholders who hold around 3000 number of shares. To this we have added estimates/approximations for
1) Few additional purchase of Shares by existing shareholders with eye on earning additional returns through buyback.
2) Purchase of Shares by Arbitrage investors.
3) Data from Previous Buybacks
Based on assumptions indicated above and considering a moderate tendering ratio, under normal circumstances SKP Securities Buyback could have acceptance ratio of 30-45%, a figure that will depend to a good extent on new arbitrage investors who buy into the stock and price fluctuation in the stock as an uptrend in stock many times is used by arbitrage investors to exit even before the buyback.
Return Scenarios: SKP Securities Buyback
The absolute returns (Profit/Loss) that may accrue to an Investors/Arbitrage trader are a function of his entry price, Acceptance Ratio and Price Post Buyback. Investors may kept in mind that stock markets are quite volatile at this juncture and there are many political and other uncertainties due to elections. We have depicted some scenarios for Absolute Returns in a table form as a function of various possible combinations of Acceptance Ratios and Price Post Buyback.
|MP Aft Buybk|
About SKP Securities
- SKP Securities Limited was incorporated in 1990 as a Public Limited Company with registered office at Kolkat a.
- Its shares are listed on BSE Ltd.
- The Company is engaged in the business of providing stock broking services, depository services, distribution of mutual funds and wealth advisory services.
- The Company is registered with Securities and Exchange Board of India (SEBI) as a member of National Stock Exchange of India Limited (NSE), BSE Ltd., National Securities Depository Limited (NSDL), Central Depository Services (India) Ltd. (CDSL) and as Research Analysts. It is also registered with Association of Mutual Fund of India (AMFI
SKP Securities: Price Trend, Summary of Financials
|Market Cap- Rs. Cr||29|
|CMP in Rs.||65.3|
|Revenue FY18 – cr||16.71|
|Equity Share Capital||4.4|
|Price / Earning (PE)||5.63|
|Price / BV||0.99|
|Sales 3 yr CAGR||13.50%|
|Debt / Equity Ratio||0|
|52 week High/Low||83.50 / 39.10|
Assessment: SKP Securities
- SKP Securities reported Negative Financial performance for the quarter ended Mar-19.
- Company is virtually debt free.
- Stock is trading at about 1x times its book value
- SKP securities is a small stock and can be quite volatile.
- Depending on the price movements, I may participate in the SKP Securities buyback to a very small extent only in event of some price correction. However it is a small buyback back with high degree of uncertainty and the larger Buybacks like Wipro offer a greater degree of transparency to investors.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering and Management . Iam also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2). This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/ Buy Back/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.